Firstly, "too much debt" is relative, you have to compare it to the industry average. Why this is so is because usually similar companies should be financing their business similarly, since they employ similar assets, and have somewhat similar profit margins etc.
However, having debt higher than the industry average doesn't mean that it is necessarily too much, you will have to see if it's cash flows are able to cover the interest payments required for its debt. One ratio to see this is the Times Interest Earned (TIE) ratio.
TIE = EBIT/Interest expense
This formula tells you how many times of you operating profit is of your interest repayment of your debts, which allow you to compare the ability of this firm to pay it's debt compared to other peers. if it is low, it shows a warning signal that the firm may not be doing well enough to pay back it's creditors.
Firstly, "too much debt" is relative, you have to compare it to the industry average. Why this is so is because usually similar companies should be financing their business similarly, since they employ similar assets, and have somewhat similar profit margins etc.
However, having debt higher than the industry average doesn't mean that it is necessarily too much, you will have to see if it's cash flows are able to cover the interest payments required for its debt. One ratio to see this is the Times Interest Earned (TIE) ratio.
TIE = EBIT/Interest expense
This formula tells you how many times of you operating profit is of your interest repayment of your debts, which allow you to compare the ability of this firm to pay it's debt compared to other peers. if it is low, it shows a warning signal that the firm may not be doing well enough to pay back it's creditors.